Trichet’s Friendly Advice

Michael “Irish Mike” Noonan ain’t a man to cross even if the old buzzard is past his three score and ten.  That low growl and beady eye tells you all you need to know if you’re unlucky enough to kick over the spittoon on his foot as you edge past him in the saloon.

If I was you, my friend, I’d git to cleanin’ that there mess offa this here boot, and then I’d git to skedaddlin outta town afore someone gits real mad.

Oh, I’m tellin you, my friends, Y’all wouldn’t mess with Irish Mike Noonan, not never, not no-how,   It don’t make no never-mind. That gun hand is still faster nor an angry rattlesnake and his eye  is good.  Some men swear they seen him pop a slug-sized hole in a high-spinnin dime from a fifty feet dead start, but no-one never  lived to tell the the same if they was on the wrong of the toss, cause all them ones had was a slug-sized hole right between the eyes.

And still, Irish Mike is a peaceable man, jest so long as you don’t never fergit not to rile him.

That is, of course, less’n y’all happen to be Frenchie Trichet, the meanest gunslinger ever seen west of the Pecos.  A man with a dead stare and twitchy fingers, he’d drill you right there on the spot jest for thinkin bad on him, specially if you jogged his drinkin elbow while he bellied up to the bar. They say he once blew up a whole bank jest cos he could.

noonan trichet bondholder bailout

One time, Irish Mike’s outfit got burned in a raw cattle deal, somethin they didn’t never have nothin to do with.  They jest bought into a bad ranch when the slippery dry-gulchers who owned it skipped town, leavin the Bond and the Holder outfits with no cattle and no money neither.  But it weren’t no concern of Mike nor his boys and the whole West done knew it.

I ain’t gonna pay no man for what’s not my debt.  It jest ain’t right, and I ain’t gonna do it.

That’s how Irish Mike said it, and everyone in the saloon knowed he were right.

Everyone apart from Frenchie Trichet, that is.

Pardon me, friend, he said, pushin back his chair from the poker table, as the pee-ano player ducked behind the bar and the girls quit dancin.  I couldn’t help overhearin.

Yeah? hissed Mike, as his eyes got squinty.  What’s it to you?

Well, Frenchie shrugged.  See, Holder and Bond is friends of mine. Real good friends. You might even call em kin. I done stood for Jake Holder’s firstborn, an’ my daughter married Jesse Bond’s boy, Ethan.

Mike cracked his knuckles and looked right back.  Everyone was froze between wantin to git out and wantin to see the end.

Frenchie, he drawled, you and me goes back a long ways, an’ we ain’t never had no beef between us, ain’t that a fact?

Trichet nodded slowly as a bead of sweat ran down the stubble of his cheek. That’s a fact, Mike.  We’s friends.

We is.  An’  I’m a-gonna tell y’all here an’ now, this debt ain’t none of our makin’.

Is that a fact?  Frenchie eased back his long coat, showin’ the pearl-handled Navy Colt .44 cross-draw style.  Let me give you some advice, Mike.  Speakin as one old friend to another old friend, if I was you, I wouldn’t be thinkin of stiffin Jake Holder and Jesse Bond.   They’re good men.  Good honest hardworkin men with families, but more than that, they’re friends of mine.  Just like you, Mike.   Comprende?

Crazy Mike Noonan stared back at Frenchie, an’ everyone could see his trigger-finger a-twitchin’, but in the end he laughed out loud an’ the pee-ano player started playin again.   The girls went back to the dancin an’ the bartender lined up a shot of red-eye for everyone.

Dang me Frenchie if you ain’t one ornery ole rattler, Irish Mike chuckled.  I ain’t never gonna do no wrong to your kin.

I’m mighty glad to hear it, Mike, said Frenchie.  Mighty glad you took my advice.

So am I, Frenchie, said Irish Mike, with a lopsided grin.  So am I.


Extending the psychopath test

It’s hardly a surprise, I suppose, to find yourself reading about psychopaths in the week following the conviction of Graham Dwyer for vile, unspeakable crimes, and yet I felt a little sheepish if I needed to put down Jon Ronson’s book in the coffee shop or the pub.  I might place it upside down.  I might turn it so that the spine wasn’t visible.  I might place something over it or beside it to obscure the title.

Why?  That’s hard to know, but perhaps it’s a reluctance to be labelled.  I didn’t want anyone thinking, There he is, reading a book about psychopaths just because that fucking nutter was convicted.

Why do I care what anyone thinks?  I don’t know, but I suppose it proves, in a loose unscientific sort of way, that I’m not a real psychopath.  After all, what sort of psychopath would care what anyone thinks of him?

Oh wait.  Most  psychopaths are obsessed with their own grandiose self-image, so maybe I am a psychopath after all.  Shit.

Jon Ronson has an easygoing, self-deprecating style, much like Louis Theroux though not quite as laid back, a style that seems to work, since he manages to persuade everyone from Haitian murder-squad leaders to Canadian psychiatric gurus to open up and share their innermost thoughts.  I nearly said feelings, but many of the people he interviewed seem to have no feelings, unless you regard self-interest, anger, contempt, greed and lust as feelings.

Wait a minute.  They are, aren’t they?  These things are feelings.  We all experience  them, so what exactly is it about the feelings of sociopaths that sets them apart?

Is it simply a linguistic trick?  Is it the elision of the word feelings with its shadow-twin, feelings?  Identical emotional planets pivoting on a shared centre of gravity as they wheel through a greater emotional solar system?

This is where popular culture sets us wrong, since we’ve all adopted the word feelings to mean something benign, something admirable, something magnificent.

I have feelings for you.  

Share your feelings with me.  

How wonderfully Paganini expressed his feelings.


Feelings can be as raw and murderous as they can be gentle and loving.  Feelings can include a hatred of Jews, a desire to exterminate all Palestinians or a savage desire to exclude gay people from  parenthood.  Feelings can hate all women, or all men.  Feelings can burn heretics at a stake, metaphorical or real.

Sociopaths don’t experience such feelings, or if they do, the feeling is as transitory as the sudden slipping of a knife between ribs and its urgent removal.  The feelings of sociopaths, to paraphrase Dorothy Parker, run the gamut of emotions from A to B.  Now I like you, now I want to fucking kill you, now I’m wondering what all the fuss was about.

It’s all about empathy.

Sociopaths, psychopaths, call them what you will, have little understanding of situations external to themselves.  They know in a kinematic way that, for example, their mother is dying, and they know that certain behaviours are appropriate in such circumstances.  Maybe they’ve seen it on TV or observed it in friends who have been bereaved, but they don’t know it in a visceral, bleeding, raw, puke-on-your-shoes-in-grief sort of way.

Does that make them evil?

No.  It makes them cold people.  It means they’re deprived of a vital human experience.

Many people who experience this condition know it full well.  Many of them don’t like what they are.  Many wish they could participate in full at the banquet of human emotions and oddly, most psychopaths are not evil, murderous or even overwhelmingly manipulative, though of course, manipulation is one of the defining characteristics of this way of being.

I call it a way of being because it isn’t a treatable disorder in the way that some illnesses are.

Psychiatry isn’t highly regarded in our society, and with good reason.  Its practitioners have invested it with an image of the occult and by doing so have caused huge damage to its credibility.   Feudian.  Jungean.  What sort of bollocks was that?  Who’d  choose a  heart surgeon on the basis of which guru he believed in? The field has moved on quite a lot since Freud and Jung have been exposed as dilletantes on a par with homeopaths, but the damage is done, and their heirs have hardly covered themselves in glory, gifting the world such horrors as lobotomy.

The field has moved on but the sociopath remains a mystery.

Ronson, in his book, outlines  the Hare test for psychopathy, a checklist based on the work of Professor Bob Hare, which has become the worldwide standard for diagnosis of this tendency.  Hare, incidentally, was less than complimentary of Ronson’s book, with considerable justification, since Ronson chose to undertake a jocular journey through the world of cold-blooded insanity, as if any other way existed to descend into the darkness of sociopathic thinking.  For myself, I didn’t read the book as a scientific treatise, but more as a bewildered meander into the sleep of reason.

Having said that, Hare wasn’t slow to charge Ronson a hefty fee for learning about his PCL-R checklist.  (PCL stands for Psychopath Checklist – Revised, rendering the final Checklist somewhat tautological but such is the madness business for you).

Here it is.

Glibness / superficial charm
Grandiose sense of self worth
Need for stimulation, proneness to boredom
Pathological lying
Cunning / manipulative
Lack of remorse or guilt
Shallow affect, blunted emotions
Callous / lack of empathy
Parasitic lifestyle
Poor behavioural controls
Promiscuous sexual behaviour
Early behaviour problems
Lack of realistic long-term goals
Failure to accept responsibility for own actions
Many short-term marital relationships
Juvenile delinquency
Revocation of conditional release
Criminal versatility

Now.  What do you think of that?

These are things, according to Professor Hare that characterise sociopaths or psychopaths, using the terms interchangeably.

How many of these sins are you not guilty of?  That was the first thought that crossed my mind.  Have I not at times tried to turn on the charm?  Have I not been a little puffed up in my own self-importance?  Have I never lied?  Have I been manipulative?

The truth is I’ve been and done all these things and almost everything else on the list as well, just as we all have, but does that mean we’re all psychopaths?

No, it doesn’t.  In order to qualify as a sociopath, you have to do a lot of these these things a lot of the time, and yes, it’s true that somebody has to decide what a lot means.  Psychiatrists, in other words.  Those people for whom the jury is still out in deciding if what they do is really a science.

And yet we have obvious psychopaths who are alleged to cause mayhem in society.  Murderers, rapists, sadists.

Don’t they fit the profile laid out by Professor Hare?

Yes they do, but that leads us to the overwhelming question: do the murderers, the rapists and the torturers really cause mayhem in our society?  For all the damage they create, and all the pain they inflict, do they really make the slightest impact on society at large, apart from stoking a salacious desire to buy newspapers?  The Sunday Independent sold out this week following the Graham Dwyer trial.   It seems there’s no limit to the public need for angry, disgusted semi-pornographic articles by Paul Williams.

Do they cause mayhem in society?

No, they do not.

A low-level psychopath will react in a low-level way, killing or hurting an unfortunate victim, but not all psychopaths are violent thugs.

If you possess glibness, superficial charm, a grandiose sense of self worth, if you’re prone to boredom and pathological lying, if you’re cunning, manipulative and lack remorse and empathy, if you have a tendency to be a parasite, if you’re impulsive and irresponsible, if you won’t accept responsibility for your actions, there’s no point becoming a murderer when you could become …

… a banker.



Economy Politics

Eleven questions the media might ask President of Renua, Eddie Hobbs (but probably won’t)

Eleven questions the media might ask President of Renua, Eddie Hobbs (but probably won’t)

  • How much money was lost by investors in the Cape Verde holiday home debacle?
  • How much money has Eddie earned from work for the public sector broadcaster, RTE?
  • Does he still believe that the female-dominated teachers unions voted as they did on the Haddington Road agreement because it was their time of the month?
  • Does he have any moral qualms about investing in repossessed property in Detroit?
  • Will he be engaging in similar vulture-fund activities in Ireland?
  • Does he share the views of Billy Timmins, the deputy leader of Renua, that rough sleeping should be made illegal?
  • Are there any other sectors of the economy, apart from public sector workers, who should see a wage freeze?
  • Given the fact that he is now a public figure and president of a political party with representatives in the national parliament, will he provide a full accounting of all investments and debts he holds so we can be sure he is free of any question of potential conflicts of interest?
  • Does he agree with the party’s consummate media performer, Terence Flanagan, that water protestors should have their social welfare payments cut?
  • How much money has he personally taken from the Brendan Investments property fund ?

Eddie is now a public figure. Its good that he and others have founded a party since we need diversity of opinion. But he comes off as cranky, thin-skinned and evasive.

It’s hard to see him lasting…


Professor Brian Lucey blogs here.


Land League Reforms to Protect Wealthy Lawyer from Repossession of Killiney Palace

Did you ever owe €71 million?

No.   Neither did I.

It’s a staggering amount of money, but by the same token, I’ve never been a hugely-wealthy lawyer, I’ve never had a property portfolio worth a billion euros and I’ve never owned a palace on the Vico Road next door to Bono, so what would I know?

brian o donnell house

Brian O’Donnell, on the other hand, knows all about these things.  Brian has been a hugely-wealthy lawyer who grew accustomed to living in a magnificent palace on the Vico Road and you know, magnificent palaces have a way of growing on you.   Somehow, it’s just so much harder to be evicted from a magnificent, opulent palace than it is from the average 3-bed semi.

But unfortunately, such are the vicissitudes of life, especially when you find yourself owing €71 million to a bank that seeks to recover some of the money it lent you.  A bank, by the way, that was bailed out using taxpayers money.  A bank we wouldn’t want to fail a second time.

How did Brian find himself in this appalling situation, owing €71 million — let me say it in words, seventy one million euros — to the Bank of Ireland?

I don’t know.  It must have been one hell of a motor car he took out a loan for, or else one seriously snazzy extension.

Seventy one million euros.  Say it and savour it, because for sure, you’ll never see it.  Seventy one million euros.

That’s a lot of dosh.

I think it’s fair to say that Brian isn’t an ordinary householder who ran into difficulty due to losing his job.  It’s probably fair to point out that he has no small children running around his Killiney mansion who might end up as mendicant snotty orphans if he finds himself ejected from his trophy palace.

Brian, in other words, is not your average terrified home-owner trying to stave off the attentions of a heartless banker, but that didn’t stop a group calling itself the Land League from blockading his palace, preventing Brian’s house being repossessed. Brian, meanwhile, remains inside his palace, still not paying back the €71 million he owes the bank.  What would Michael Davitt make of it all?

It’s hard to escape the echoes of those other millionaire Killiney denizens, the Kellys, who resisted eviction despite owning rental properties all over Ireland and London.

What is it about vastly wealthy people?  Do they feel the pain of eviction more than the dirt-poor negative-equity wage slaves who are routinely turfed out of their homes by the banks?

Is it that they’ll feel more pain having to live in a four-bed Foxrock estate house than the poor people will feel having to live on the streets?

I feel like saying fuck them, but I won’t.

Yes I will.  Fuck them.

brian o donnell house 002


Enda Kenny Lays Down the Law With Greece

Many years ago, we had a dog called Lazarus.  He wasn’t named after the famous Lazarus who rose from the dead at the command of Jesus, but after an entirely different Lazarus, a poor beggar who crouched at the rich man’s table and scoured the ground for whatever crumbs might fall there.  He was a nice dog, but he did have a habit of grovelling and moaning until someone threw him a few crumbs.

Now, you might think I mention this parable in reference to the Greeks, but I do not.

Getting support from Europe does require conditions to be adhered to, warned Enda Kenny, in an impressively lifelike illusion.  Robotics has come a long way from the days when a ventriloquist had to sit the puppet on his lap with a hand through a hole in its back.  These days, they can be radio-controlled and the new plastic skin is incredibly convincing, though they still haven’t quite nailed the synthetic voice-box and the hair is a bit red to be fully human.

Was that a trace of a Dr Strangelove accent creeping into Enda’s lecture as he reminded Greece about getting too uppity with the ECB and his good friends at the top table of Europe?  The ones who occasionally throw Enda a crumb when they’re not patting him on the head or kicking him.

Enda would do well to remember what country he’s the Prime Minister of.  This is the country where, according to Professor Bill Black, the government made the worst financial mistake in history.  A country where insane decisions were taken, including the decision to bail out subordinated bondholders, which has never happened anywhere else.  A country that capitulated fully to the bullying of the ECB and the European Commission, with the result that the country sank.

And after Kenny crawled into office by defeating the worst government in our history, he continued to support the same insane decisions that had sunk the country, including paying subordinated bondholders every  penny of the face value on the paper they held.  He continued to provide high-risk gamblers with a guarantee of winning the jackpot.

Now, in an embarrassing example of Stockholm Syndrome,  here’s Enda parrotting the words of his remote-control operators, and patronising a country that seeks to resist the sort of bullying that drove Ireland to the precipice.

I imagine the Greeks laughed it off, if they noticed at all.  In truth, who could be offended by anything an automaton might say?  Especially an automaton that is still too stiff to pass a Turing Test.

The Lazarus-2015 unit is working well enough, but it’s still at the development stage.  Unfortunately, it somehow managed to become our head of government.

Send for Deckard.



Enda gets an Action Man




Bank Guarantee Could End Up Costing €40 Billion, Says Central Bank Governor

Forty billion euros.

Forty thousand million euros.

That’s how much it might cost us to bail out the gamblers who made bets on the two failed banks, Anglo and Irish Nationwide,  combined with the potential losses in AIB, full of swaggering puffed-up fools into which the government pumped €20 billion.

The good news is that they’ll probably get back something from AIB since it’s still trading.   They might even get back the entire amount, though Professor Patrick Honohan, current governor of the Central Bank, doesn’t seem too sanguine on the subject.

In his evidence to the Dáil banking inquiry, Honohan suggested that Michael Noonan was hoping for improved share prices  rather than basing his predictions on the current reality, or as we sometimes call this sort of behaviour, being a politician.

The truth is that, as matters stand, Ireland is exposed to a cost of €40 billion as a result of propping up two failed banks and one basket case, and this is real money we’ll have to pay.  This is a burden more crushing per capita than the German reparations from both world wars, even though we invaded nobody, bombed nobody and murdered nobody.

And all because the German-dominated European Central Bank wouldn’t let us liquidate Anglo Irish Bank and Irish Nationwide.

Why?  Who knows?  Some form of fiscal orthodoxy perhaps that prevents governments from pointing fingers at idiots.

What idiots?

Simple.  The idiots who ran those banks, including idiots like David Drumm, the thoroughly unbelievable, lying, fraudulent spiv at the controls of Anglo, if the US judge’s assessment of him is to be believed, and Fingleton, a puffed-up fool who walked away with a cool million and a gold watch after his ridiculous building society folded.  Not to mention those idiots who ran AIB into the ground.   The same people who cornered Lenihan and Cowen in the middle of the night and bullied them into extending a general guarantee to every bank in the country, even though there was no good reason to do so.

According to Honohan, Brian Lenihan didn’t want to guarantee Anglo or Irish Nationwide, perhaps recognising firstly that they were both completely sunk, thanks to mismanagement, but also that letting them go would have no lasting impact on the country, since neither bank was integral to the economy.

Honohan claims that Lenihan was overruled by a senior political figure during the famous incorporeal cabinet meeting, attended by three men and a host of snoring fools, so that’s got to narrow it down.  There was Lenihan, the attorney general and there was Biffo, without a pint in his hand, and not singing, but still not at his sharpest by the look of things.

Who overruled Lenihan’s advice?  I don’t know.   Perhaps it was the ghost of Charlie Haughey.  Perhaps it was, but we need to be told. When forty billion euros are at stake, when the entire country’s destiny is on the line, do you really want a pub-singing Offaly solicitor making the final call?

Who made the decision to saddle Ireland with a debt of €28 billion from Anglo and another €36 billion from other sources, for no obvious reason?  And why?

This is something we need to be told.

These people need to take responsibility for what they have condemned Ireland to endure for generations to come.

And if they won’t take responsibility, they need to be held to account whether they like it or not.


Here’s an estimate when we thought the cost was only €25 billion.


A Plague of Economists – Ireland from Collapse to Renewed Hubris

The one good thing the last six years has brought is that we no longer have to suffer from bond salesmen in the media, pontificating and solemnly suggesting that everything is just fine, even though buttons are bursting all around us and the economy turns into Mr Creosote.

Just a wafer thin bank guarantee …

The bad thing is that the university economists have replaced them, scattering sackcloth and ashes and making the Minister for Hardship sound like Tommy Tiernan.

More than most, we in Ireland seem to have a lot of them on the telly, on the radio , in the papers, a bit like having epidemiologists on the telly during the Black Death, if they had telly, or epidemiologists, and to be honest with you, the analogy is closer than I realised when I started making this limp joke.   It is a plague, isn’t it?  We’re living through an economic plague and the economists are, perhaps, one symptom (or maybe a cause) of it.

If you exclude David McWilliams, most commentary now is from university economists, which of course is not necessarily a bad thing.  Probably the mouthiest of them is Brian Lucey, who donates an occasional pearl of wisdom to this site, but he’d be in close competition with The Count (and not in a Charlie Flanagan sense) Gurdgiev, the Dark Prince of economic gloom on the telly.

It’s funny, but not in a funny way.  Not so long ago, how many economists did we know?  I’m guessing roughly none.

Not one.   Not a sausage.

Given a choice between listening to practitioners of the Dismal Science and following the World Grass-Growing Championships.most of us were in there cheering for Fescue.

But nowadays, now that the sky has actually fallen, everyone wants to be on the side of Chicken Licken and we all know them.   The smart young lad from Limerick, the chap from Cork, the gobby Kerryman, the ubiquitous mellifluous one from DCU, Dr Doom from Moscow.  Others like the jolly one from UCD, the glumly-accurate expert in the Black Death who saw parallels with the Irish economy.  The baldy one from Trinity.

They mostly seem to reside in the newspapers and magazines now, not on Drivetime, Vincent Browne or Newstalk, and in some ways I suppose that’s a good thing.   After all, they are public servants, albeit in the superior, condescending way that Sir Humphrey is a public servant, so we may as well get some public service from them.

Like all academics, they have a number of things to do. They’re supposed to teach, to publish research, to pitch into fundraising and admin.  And, as professors, they’re supposed to profess.  To try to explain what exactly is going on.

So what are they doing?

University libraries are great places. With a very little effort and a half-decent excuse, members of the public can usually get into them. Nowadays 95% of what they do is on line and there’s a great database called Scopus, from Elsevier, the massive rent-extracting machine that controls a whack of the world’s scientific journals and charges eye-watering amounts to read content.  Into the library, onto the database, plugging in some names and hey presto. What the talking heads have been doing is revealed.

Since the Great Plague of 2008, you’d imagine all these professors would have been churning out professorial papers in gigantic abundance, wouldn’t you?

Admittedly, quantity doesn’t equal quality, and I suppose that one good piece is worth a hundred useless ones but a first step in getting a good piece is to get any piece, and these guys are paid to do research, which presumably includes publishing it.

So here we go.

Nonsense published since the Great Plague, by the mediaconomists.

In order of output.

Brian Lucey 52
Stephen Kinsella 19
Karl Whelan 13
Morgan Kelly 9
Constantin Gurdgiev 4
Seamus Coffey 0
Tony Foley 0

Naturally, this doesn’t mean they published anything that made sense, but still, we have to start somewhere.


Sean Quinn Out of Bankruptcy

Sean Quinn will be discharged from bankruptcy next Friday, wiping out the €2.1 billion debt he owes to Anglo-Irish Bank, otherwise known as the Irish taxpayer, but the good news doesn’t stop there.

Not only is he free of his debt, but Sean is back behind a desk at the Derrylin plant where he used to direct his business empire, and that’s thanks to the generosity of his friends and supporters.  Sadly and unfortunately, when the bank took over the business and changed its name to Aventa, there was a series of criminal attacks on the premises and on people managing the operation, by persons unknown.  It was a good thing that former Quinn executives got together and bought back some of the business, ending the criminal activity and providing Sean himself with an income, however meagre compared to his former wealth.  He’s back as a consultant, on an undisclosed salary, and free of the crippling burden he formerly carried: two billion euros of debt to Anglo-Irish Bank, on top of the €2.34 billion his family are currently disputing in the courts.  Apparently, they were given the loans unlawfully and they don’t see why they should have to pay the money back.

That’s correct.  You heard it right.  They took out the loans, but they don’t think they should have to pay them back, because the bank was wrong to give them the money.

Sean’s burden will now be carried instead by the general public, to the tune of a little under €2,000 per household, and when you think about it, that’s not such a huge amount of money.  It’s just the price of your car insurance and maybe your electricity bills for a year.

Sean, however, isn’t getting off scot-free.  No indeed.  The official assigned to oversee his bankruptcy has extracted a major concession, forcing Sean to pay €10,000 a year for a full two years out of whatever earnings he makes in his job as a consultant with his former company.

That’s twenty grand, not a sum to be sniffed at.  It saves each household in the country about €1.70 out of the €2,000 they’ll be paying.  The price of a coffee in a homeless shelter, maybe.  Again, not to be sniffed at.

That’s a full 0.000001% of what he originally owed.

Of course, it’s important to remember that Sean Quinn isn’t solely responsible for the burden placed on Irish families, and I can guarantee you that he’s a much nicer man than Roman Abramovich.  I met Sean once, and found him an affable sort of chap who bought his round and had few airs and graces about him.  Abramovich isn’t nearly as amiable, but he was also paid a large wedge of cash as a bondholder in Anglo after he bought the bonds for half nothing but got paid full face value, for no obvious reason.  Abramovich and an entire school of sharks make up the total of €34 billion that Ireland put into two banks: Anglo and of course Irish Nationwide, otherwise known as Fingleton’s Folly.

Today we hear that the government hopes to get back some of its €20 billion investment in AIB by selling its 99.8% holding in the bank, which is another way of saying that the government has given up hope of ever getting help from Europe for bailing out the three functioning banks, AIB, TSB and Bank of Ireland.

Wait a minute, do I hear you saying?  Didn’t they bail out Anglo and Irish Nationwide too?

Well, no, actually.  They didn’t.  Those banks are kaput.  They’re gone, they’re over and they have no chance whatever of returning.  The money pumped into those two institutions bailed out nobody.  All it did was enrich the vulture capitalists who bought bonds at a heavy discount after they had been dumped by the original investors who recognised that a deal had gone sour, shrugged their shoulders and walked away.

So we’ll never see a penny of that €34 billion, ever again.

That comes to about 17 years of car insurance and electricity bills per household, gone for good.

Gone to pay for Chelsea strikers and yachts in the Adriatic, so at least it wasn’t wasted.





Paying Anglo Bondholders

They haven’t gone away, you know, as Gerry Adams once chillingly reminded us, in a different but equally sinister context.

They haven’t gone away, those Anglo bondholders, those gamblers who took a punt on the worst bank in the world, while fully aware that they might lose their bet.

Our government bankrupted the  country to pay off the senior bondholders in two banks that were  little more than pyramid scams, even though neither Anglo-Irish Bank nor Irish Nationwide had any value to the economy at large.  Both banks were nothing more than failed Ponzi schemes and yet the Irish State somehow felt it necessary to step in and take responsibility for their losses.


Nobody knows.

The decision to pump money into those two banks increased the national debt by €34 billion and it brought no return to the country at all, because it wasn’t a bank bailout.  It’s not as if anyone thought, with a little time and help, the two banks might get back to profitable trading.  They were dead, both of them, and therefore the cash injection paid for by you and me was not a bank bailout.  There was never the slightest chance that these banks would be able to pay back our money.

These banks were dead.  Deceased.  These were ex-banks.

It was a bailout by the Irish taxpayer of the gamblers who had taken a chance on the Ponzi schemes calling themselves financial institutions.   If the government had sent civil servants to stand outside every bookie shop in the country paying out on non-runners and Aston Villa victories it would have been exactly the same as what happened with Anglo and Irish Nationwide, but much cheaper.

What was worse is this.  Most of the original bondholders had dumped their stakes, leaving sharks like Roman Abramovich to pick up the almost-worthless paper at a fraction of the face value and to demand full price from the  Irish government under threat of legal action.

And guess what?  The government paid the Russian oligarchs their 900% profit without a murmur, just as they’re proposing to do again, today, despite universal agreement that junior bondholders should not be rescued from their bad financial choices by tax money.

It’s coming at a bad time, this decision.  The optics are not pretty.   As we speak, homeless people are dying of cold on the streets of Dublin and Cork and Limerick and Galway and Waterford and Dundalk and all the rest of it while publicly-owned buildings lie idle.

How much would it cost to open these buildings, do them up to a basic standard, something better than sleeping in a laneway, with some heat and some food and some shelter?

Would it cost €10 million?  I don’t know.

Would it cost €50 million?  I don’t know.

Would it cost €100 million?  Again I don’t know.

What I do know, however, is that the government is preparing to pay €280 million to unsecured Anglo bondholders, on behalf of a bank it should have no responsibility for, to people who should have no expectation of being looked after.

There’s the question for you: bondholders or homeless — who should we be looking after with the money our government takes from us in taxes?

Who comes first, financial speculators or poor Irish people?  The answer to that will tell you if we built a successful republic or not.


The Financial Times – Getting it Wrong on Ireland, in Every Way Possible

So, the FT has an op-ed on the Irish recovery.  And it is, sadly, about as wrong as can be. 

The op-ed starts with the facts, of the crash and the recovery. Then it moves into how this miracle happened (noting the actions of Draghi in reducing bond yields as key, a fact lost on the cheering chimps of cutting that lurk in .

In some ways Ireland has been fortunate. Its two biggest trading partners, the US and Britain, are both growing strongly.  Its low bond yields owe more to the decisive actions of Mario Draghi, European Central Bank president, than to any decisions made in Dublin.

So, the external environment has been in our favour. And it has.

The FT has two main paragraphs on how we dunnit, whatever it was we dun.

The first is a doozy.

The costs of a bloated public sector were reduced with swingeing wage cuts and slashing the payroll.

Nice to see that they identify the real culprits – NURSES! :). Phew, that’s simple then. Reduce bloat, and get bigger.  Sort of a  conflation of the Neutron Diet and expansionary fiscal contraction.

Private sector wages have fallen by more than 2 per cent annually in the past four years, restoring competitiveness to industry.

Really wonder if that was all it took.  If it was a mere 2% per annum for 4 years that’s a cut in wages of less than 8%.  Given that wages are a part (how much?) of industrial costs, it seems unlikely that that would be the driving factor.  The National Competitiveness Council 2014 report rings alarm bells, with a whole range of issues other than wages exercising its concern muscles – see page 4.   I also don’t know where the numbers come from. The CSO data suggest that compared to Q2 2010 private sector wages are actually UP by about 1.5%.

Above all, the government recognised the serious risk played by its shattered banking system and took steps to rebuild it.  Through its “bad bank”, the National Asset Management Agency, it made banks come clean about their losses.

Above offer excludes residential and buy to let (fester) mortgages.  Honestly, this can only have been culled from a government press release.

By forcibly swapping toxic assets for safer government debt, it cleared the way for lending to start again.

Ah, the old “NAMA will get credit flowing” reborn as “NAMA got credit flowing”.  Except, it didn’t.  Lending hasn’t started again.  A glance at the Central Bank Business credit data will show that credit growth rates to business have been negative since 2011.  NAMA will do what again now?

It then goes on to say some frankly bonkers things

Instead, Ireland must rely on exports and on attracting overseas investment. Wage restraint has restored competitiveness, which alongside a flexible English-speaking labour force, make it a choice destination for multinational companies such as Pfizer, Dell and Apple.  As a result, Ireland has a healthy current account surplus and investment growth of 15 per cent per year.

Hmm.  Again the wages, despite ZERO evidence that they are a driver of good or bad competitive pressure. Again the haunting sense that this reads like something a politician might say. Again, a missing of the points that the Irish Balance of Payments is a volatile beast.  A look at Table 1 of the CSO release will show just how. And don’t, please, mention anything about tax-efficient investment strategies, or the mysteries of how computers can be manufactured and sold from Lodz in Poland and appear as Irish exports.

For struggling eurozone nations it must be tempting to place their hopes in more effective action at an EU level. But recent efforts to pep up demand look insufficient.  And for small, open economies such as Ireland external conditions are far less important than steps taken at home. 

Yes, because when you trade with the world, what they have in terms of demand conditions are irrelevant.  Some modern equivalent of Say’s Law holds at all times internationally, so relentless cost pressure (via wage restraint, regardless of whether that is relevant or not) is the only way forward.  And don’t look for anything remotely like coordinated supranational coherence.  Yer on yer own. And didn’t they say at the top that the external environment was the key?  I’m confused.




This article first appeared on Prof Brian Lucey’s blog here.